Pennsylvania pension reform stalled by lack of voter concern

Gov. Tom Corbett isn’t the only official these days preaching the need for pension reform.

Corbett calls the state’s $41 billion underfunding problem a “tapeworm” devouring the budget. Illinois has its own cartoon character, “Squeezy the Pension Python,” created by Gov. Pat Quinn, according to a report in The Philadelphia Inquirer. Illinois faces $98 billion in unfunded pension liability.

Snakes and parasites aside, the issue that many officials are calling a crisis has not caught the imagination of either the general public or the legislators who must vote on the reforms Corbett is proposing.

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A month after Corbett introduced pension reform as part of his budget proposal, the mood of the legislators remains cool to reform.

Corbett and Budget Secretary Charles Zogby have painstakingly detailed the crisis not only to the Legislature but also to media groups and editorial writers around the state. The fiscal crisis has been laid bare before taxpayers and voters, but little outrage or even concern has arisen in response.

Instead, the outcry has come from union leaders poised to take the battle into court if Corbett’s plan advances.

The governor’s proposal would transition state pensions for new employees from defined benefit to defined contribution, meaning public employees would join much of the private sector in trusting their retirements to a 401(k) style plan. The governor is also proposing freezing benefits for current employees and reducing the multiplier used to calculate pension amounts, two measures that have raised the hackles of union leaders.

Corbett’s plan is projected to save $12 billion in future pension benefits, making a dent in the $41 billion liability. That’s if the Legislature approves it, which is not a certainty considering the lukewarm response in Harrisburg. Then there’s the legal challenges promised by employee unions. Even Corbett and Zogby say courts could easily overturn reforms.

Although most voters in Pennsylvania don’t seem outraged about this scenario, more of them should be.

The pension reforms proposed by Corbett reflect economic realities that hit the private sector a long time ago. Employers have frozen pensions, reduced 401(k) contributions, cut salaries and eliminated similar benefits to employees with no legal recourse or complaint.

In contrast, it seems the benefits of public employees are exempt from the realities of hard times.

Pension reform is not intended to rob teachers or public employees of the benefit they’ve earned. But the economic reality is that the system is currently too generous to be sustained for the future.

It’s time to face that truth and realize being an employee of the taxpayers does not mean money comes from an endless source.

That’s not going to happen until the taxpayers/voters understand the seriousness of this situation and demand reform from legislators.